PROEN Public : Notification of the additional progress of acquiring of Digital Assets in Cryptocurrency (English revision)

No. PROEN 15/2022

Date: May 13, 2022

Subject: Notification of the additional progress of acquiring of Digital Assets in Cryptocurrency

To:	The President
	The Stock Exchange of Thailand
Ref:	Notification to the SET no. PROEN 14/2022 published on May 31st, 2022 Re. Notification of the progress of
	Acquisition of Digital Assets in Cryptocurrency

According to PROEN Public Co., Ltd. ("The Company"), it has approved the investment of Digital Assets in cryptocurrency in accordance with the terms of its partnership with Bitkub Blockchain Technology Co., Ltd. ("Bitkub"). The Company had clarified through the SET website on May 31st, 2022, and the Company would like to clarify more details as follows.

1. The Company shall be the partner in validating transactions (Validator Node) as PoSA (Proof of Stake Authority) on Bitkub's Blockchain transaction validating system (Bitkub Chain). The Company is responsible for the legitimacy of transaction copies from electronic transactions on Bitkub Chain platform. The company will gain reward from transaction fees incurred on Blockchain in terms of KUB coins. When there is a high rate of transactions, the Validator Node will gain more KUB coins accordingly. There is a chance of gaining a high return of 40% from holding the coin according to the agreement of holding KUB coins. Anyone to be the Validator Node has to stake KUB coins, which is the main condition. The Validator Node must buy KUB coins issued by Bitkub Blockchain Technology Co., Ltd. "The coin seller", it is indicated that the Validator Node must buy KUB coins at the maximum amount of 250,000 KUB per each of Validator Node, or can be able to buy lower amount with the right of Validator Node deducted as per proportion of the amount of KUB coins holding.

The Board of Directors has considered factors under the current situation and opined regarding the investment in Digital Assets in Cryptocurrency. The Board of Directors demanded the managements to study the worthiness of entering into the transaction, advantage, disadvantage, as well as any events and factors may incur. The Company must have specialists who have skill and experience in order to study the worthiness of an investment for the utmost benefit of the Company. The investment value required much fund, which may hinder the financial management, therefore the risk management is necessary. Moreover, the Board of Directors carefully considered the investment risk in order to ensure the investment is complied with the investment policy and plan of the Company, and ensure that investment assessments are regularly monitored.

2. The bookkeeping is divided into 2 parts as follows:

2.1) The item regarding 250,000 KUB coins holding with the terms that prohibit the Company to sell and/or exchange such coins. The item will be recognized as a funding agreement as there is a price guarantee at minimum price when due, which the price must not be lower than the purchase price.

2.2) The item of the rewards from being a Validator Node must be recognized as an intangible asset item (Digital Assets). The initial bookkeeping of Digital Assets cost is according to the cost price, which is the fair value at the asset acquisition date. After recognition of the initial item, the Digital Assets price is in accordance with the cost price (weighted average method) deduct allowance for Impairment Losses (if any) at every report period ending date. The Company will assess the impairment losses of Digital Assets, and it will be recorded when the book value of Digital Assets is higher than the fair value deduct the cost of sale at the report period ending date. The fair value calculated by the closing price at the report period ending date from the Digital Assets exchange website. The Company will dispose the Digital Assets item from accounting when the assets sold, or expecting that it has no economic benefit in the future by the use or sale of the assets. The profit or loss from sales of asset will be recognized in the profit/loss item. In this regard, Digital Assets will be included as part of intangible assets in the consolidated financial statements.

3. Risk Management regarding business operation in Digital Assets in Cryptocurrency as a Validator Node in Blockchain system with a condition that the company required to purchase KUB coins from Bitkub, which has

the significant risks as follows:

3.1) Risk of KUB coin price volatility

The legitimacy of the transaction (Staking), as a result, the Company is required to purchase KUB coin in the amount of 250,000 coins from Bitkub (in the amount of not exceeding 72,949,815 Baht). Recently, the information shows that the price of KUB coin highly fluctuated. It is unpredictable whether the price will rise or fall. In order to prevent the risk of the price lower than the cost price, Bitkub and the Company then has agreed to amend and sign an amendment to the agreement on May 31st, 2022, to guarantee that price must not be lower than the price the Company invested, referring to the price on Digital Assets exchange Bitkub at the day the company invested. However, when the referred price of the Digital Assets exchange Bitkub higher than the minimum guarantee price, the Company can be able to take profit from the trading price at such date, and in order to guarantee the buyback price when due on May 31, 2023. The condition later has been changed the guaranteed minimum buyback price according to the agreement signed on March 30th, 2022, determining the new period from March 31st, 2022 to June 15th, 2023 in order to comply with operation period of the Company and Bitkub. For the amended agreement above, there were no any extra expenses. The disclosure of trading price of Digital Assets was to assure the company's shareholders that the investment will not bring any risks of KUB coin against the high volatility of its price that increase or decrease.

3.2) Risk from business operation

Since investing in Digital Assets is still new issue, the Company has to study, analyze, and assess the situation, information, as well as the technology changes, declarations and regulations issued by regulators for the policy review and adjustment, and measures for the investment in Digital Assets of the Company in order to prevent and reduce risks that may occur. The Company has assigned the management to review, present, and propose the suitability of the transaction, investment policies, and measures to the Audit Committee and the Committee in every quarter. The Company has personnel who have sufficient knowledge, expertise in Blockchain system technology in order to be a Validator Node as PoSA (Poof of Stake Authority) for the legitimacy of transaction on Blockchain, to ensure that the investment maximize benefits to the Company and Shareholders.

4. The Company formulated Digital Assets Investment Policy

Digital Assets, in terms of risk management policy, means electronic unit that contains value similar to regular

assets, intangible, built in a system or electronic network, able to trade for the ownership, exchangeable without the medium, which run online and on Blockchain system. The transactions will be recorded by computer without the medium, and its value is created on a digital system. The investment policy of the Company is as follows:

4.1) Investment according to the condition that the company is a Validator Node, responsible for the legitimacy of the transaction on Blockchain, which is the technology that process and store data in a decentralized way or Distributed Ledger Technology (DLT), the data recording using Cryptography principle together with Consensus mechanism. The data recorded on Blockchain improve the correction and the reliability of data, the Validator Node will gain rewards from transaction fee incur from making transaction on the network in terms of coins.

4.2) Investment for the purpose of the study of Cryptocurrency Mining, in order to study, create an experience in distribution and being the Cryptocurrency Mining system designer, Cryptocurrency Mining machine deposit service, and provide after sales service.

The Company has an investment policy for the purpose of study for the expansion of Internet Data Center business. It is only to increase new products and services, There is no policy to invest for profit as the main business, and the capital investment is limited of not exceeding 10% of the total assets due to the investment in Digital Assets has high risk comparing with other assets, including the high volatility of Digital Assets may significantly affect the financial position and business operation.

Please be informed accordingly

Best Regards,

PROEN Corp Public Company Limited

(Mr. Kittipan Sri-bua-iam)

Chief Executive Officer